What is DMAT account?

is it necessary requirement for all the kinds of investments?

Demat account, short term for dematerialised account is a type of banking account which dematerialize the paper-based physical shares.

The idea of dematerialised account is to avoid the need to hold physical shares--the shares are virtually being bought and sold through the banking account.

This account is popular in India and also the SEBI mandates demat account for share trading above 500 shares.

All shares, debentures, bonds are traded in DEMAT format only and one has to have a account with a Depositary participant who deals with this paperless shares-.

YES COMPULSORY

it is electronic securities account, like bank account for your investments. u do not need to hold stocks etc in physical form.
No this is not necessary for all kinds of investment, however must for stocks trading

Shares can be in the form of paper or in the digital form (for online trading).

Earlier shares existed only in the paper format. But now, with the advent of online trading, shares exist in the digital form too. As it is in the digital form, it is called "demat" --> meaning "Dematerialised" - that is, it is no longer in the material (paper) form.

Demat accounts are needed to operate with online shares.

I know it is necessary for online trading. But I'm not sure about other investments.

DMAT account is an a/c to hold your share certificates in electronic form.
It is not necessary for all your investment.
It is only used for investment in share scripts(share market)
If your in share market business then DMAT a/c is compulsory,with out this you would not be Abel buy or sell any scirpt.

This has given a huge relief to the investors who lived with a fear of duplicate share docs.After dematerialising to an electronic form , it offers no chance to counterfeit. On line trading also has become lively. This is the very reason of huge retail participation in the recent past, hence pushing the nifty near 4k. One cannot do trading in stock market with out dmat account. But certainly not a mandatory for all kinds of investments.

Demat refers to a dematerialised account.

Though the company is under obligation to offer the securities in both physical and demat mode, you have the choice to receive the securities in either mode.

If you wish to have securities in demat mode, you need to indicate the name of the depository and also of the depository participant with whom you have depository account in your application.

It is, however desirable that you hold securities in demat form as physical securities carry the risk of being fake, forged or stolen.

Just as you have to open an account with a bank if you want to save your money, make cheque payments etc, Nowadays, you need to open a demat account if you want to buy or sell stocks.

So it is just like a bank account where actual money is replaced by shares. You have to approach the DPs (remember, they are like bank branches), to open your demat account. Let's say your portfolio of shares looks like this: 150 of Infosys, 50 of Wipro, 200 of HLL and 100 of ACC. All these will show in your demat account. So you don't have to possess any physical certificates showing that you own these shares. They are all held electronically in your account. As you buy and sell the shares, they are adjusted in your account. Just like a bank passbook or statement, the DP will provide you with periodic statements of holdings and transactions.

Is a demat account a must? Nowadays, practically all trades have to be settled in dematerialised form. Although the market regulator, the Securities and Exchange Board of India (SEBI), has allowed trades of upto 500 shares to be settled in physical form, nobody wants physical shares any more.

So a demat account is a must for trading and investing.

Most banks are also DP participants, as are many brokers.

You can choose your very own DP.

To get a list, visit the NSDL and CDSL websites and see who the registered DPs are.

A broker is separate from a DP. A broker is a member of the stock exchange, who buys and sells shares on his behalf and on behalf of his clients.

A DP will just give you an account to hold those shares.

You do not have to take the same DP that your broker takes. You can choose your own.

Hello dear, first of all its not DMAT, its Demat Account. It is an account that holds your shares in Electronic Format and is compulsory for trading in Shares, F&O, Commodities, etc.

Also for your knowledge, it is not required for dealings in Mutual Funds.

Hope that solves all your queries.

So, Happy Investing.